Greenfield writes that he expects Facebook to report higher third-quarter ad revenues from these efforts, but warns that the heavier ad volume could drive away users over time. He said mobile ads in particular would take up more space on screens, annoying users and raising the chances of accidental clicks.

"Unfortunately, we believe this ramp in advertising is negatively impacting the user experience on mobile devices by adding to an increasingly cluttered -- less-useful -- news feed," he wrote. "In the face of drastically slowing payments revenues and falling investor sentiment and employee morale, it feels like Facebook is pushing advertising monetization harder than they should be, which we believe will harm user engagement in 2013 and beyond."

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As a result, Greenfield lowered his estimate for this year's revenue from $5 billion to $4.9 billion and said Facebook will also make less than expected in 2013. He downgraded next year's revenue from $5.9 billion to $5.6 billion.

Facebook COO Sheryl Sandberg recently arguedthat Facebook's advertising approach is different from traditional approaches because the targeted ads are done so well that they become a part of the news feed experience. Greenfield begs to differ, noting that Facebook's "lack of targeting and creativity" in advertising makes it less likely it can create an ad network for third party sites that can challenge Google's AdSense.

He wrote:

Facebook advertising appears relatively generic, talking to a wide swath of consumers -- similar to television -- with very little targeting and with a very low bar in terms of the level of creativity Facebook requires from its advertisers. To make matters worse, we increasingly see brands violating Facebook's social mission by deceptively trying to acquire Likes, so they can target you and all your friends going forward.